Iron ore auctioning by the southern Indian state of Karnataka is poised to be stopped with the Indian Supreme Court directing the state government to submit alternative plans for allocating the raw material to consumers, Karnataka government officials said on Friday, April 28.
The Supreme Court directive was issued in course of hearing of several petitions relating to iron ore mining in the state.
At the same time, an official at the India’s Ministry of Mines said that the process of allocating iron ore though e-auctions held in states like Odisha and Goa might be changed since the auction will become irrelevant once the Indian government imposes a price band to curb volatility in iron ore pricing.
The official said that, with a price band in place, competitive bidding through e-auctions will not be able to push up prices beyond the maximum level of the price band and so state governments will have to frame an alternative mechanism for allocation of iron ore to steel mills that will be compatible with the price band.
The Indian federal government is expected to make a formal announcement regarding the price band next month.